Pub. 5 2015-2016 Issue 6

14 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S FEATURE ARTICLE JAMES MCGUIRE COMPLIANCE ALLIANCE Our Tax Dollars Hard at Work— SCRA in Congressional Limbo A t midnight on December 31st, 2015, the current version of §533(b) of the Service- members’ Civil Relief Act (SCRA), which postponed foreclosure on military mem- bers to one year aftermilitary service, sunsetted. The puff of smoke created by this provision’s sudden ab - sence inevitably has left both SCRA-covered borrow- ers and financial institutions blind and befuddled. Although no one is 100% sure of what the cor- rect protection period is now, most feel that since the 2008 HERA amendments that previ- ously set this protection period at 9months also have expired, the pre-2008 protection period of three months is now once again the law of the land. It’s important to keep in mind, however, that this reset to three months may prove to be extremely short-lived. With heavy bipartisan support, the one-year protection period looks to return within the next couple of months and be made retroactive—the question is merely when exactly that will happen. On December 15th of last year, perhaps taking note of the urgency that the sunsetting of this issue proposed, the US Senate passed S. 2393, an extension of the one-year protection period which would keep the provision in place for two more years, or until the end of 2017. (The text of the bill can be found at https://www. govtrack.us/congress/bills/114/s2393/text .) This extension was considered such a slam- dunk, it passed quickly and unanimously. The senate bill’s companion in the House of Representatives, however—HR 4252—has not fared nearly as well. It, along with an earlier related bill (HR 189) that would only extend the one-year protection period through the end of 2016, has been languishing in a subcommittee of the House Committee of Veterans Affairs since late December. The sponsor of the Senate bill was a Democrat, and the sponsor of both House bills are Republicans, so clearly there is no issue regarding partisanship over these bills. Nevertheless, for bureaucratic reasons unknown, the House bills continue to collect dust in subcommittee. The limbo caused by the failure to extend the one-year protection period negatively impacts covered servicemembers in a variety of ways. First of all, a change from one year to three months no longer mirrors the SCRA’s one- year protection period for the 6% interest rate cap on servicemembers (§527(a)(1)(A)), which now forces delinquent military borrowers to keep track of two different timelines for their loans. Earlier impact studies performed by the General Accounting Office (GAO) have The limbo caused by the failure to extend the one- year protection period negatively impacts covered service members in a variety of ways